The company makes no profits. It has little revenue. It has just 13 employees and they have not yet worked out how to make money from their product, which they give away.
But this company, Instagram, has just been sold for $US1 billion. Its founder, Kevin Systrom, will receive about $400 million for a company he started two years ago when he was 24.
If ever there was a moment that defined the shift in the balance of power to mobile phones, this is it. The exploding popularity of Instagram offers more proof that a picture is worth a thousand words.
Instagram, a free app on smartphones, now has a higher market value than The New York Times.
One thing Systrom has worked out is how to connect with people. Instagram makes it easy for people to share photos on mobile phones, and does it so well it has quickly acquired 30 million subscribers.
Something happened during the past week. A year ago, Instagram raised venture funding, which valued the company at $25 million. Ten days ago, Instagram was given a market value by its venture capitalists of $500 million. A week later, it was worth $1 billion.
Why? Because Mark Zuckerberg, the founder of Facebook, saw this nascent company as an opportunity and a threat.
This transaction did not take place in the real world of listed public companies. It took place in the alternative reality of Facebook, which has a dominant and voyeuristic presence in social media but has yet to convert that dominance into profits in the way Apple and Google have done. Even so, Facebook has a nominal market value of $US100 billion and has billions of dollars in venture capital to invest.
Even though photo sharing is what turned Facebook into a behemoth, it was never able to translate the superiority of its product on computers into a similar superiority on mobile phones, where its process is clunky, especially when compared with Instagram.
The explosion in both the number of users and enthusiasm for Instagram's product thus represented a threat to Facebook because it could cannibalise the amount of time spent on Facebook and offer a superior community experience in photo-sharing. It was becoming the next big thing in Facebook's domain.
This was equally obvious to Google, which has failed in numerous attempts to convert its dominance as a search engine into a major position in social media.
What appears obvious is that Instagram went from being, at best, a $500 million company to a billion-dollar company in a few days because of an off-stage contest between Google and Facebook. Zuckerberg was willing to pay whatever it took to keep Google from getting the opportunity Instagram represented.
If he could spend 1 per cent of Facebook's projected $100 billion market value denying Google a strategic foothold in mobile phones and photo-sharing, and solve Facebook's own problem with mobile phones at the same time, it did not matter whether Instagram had any profits or any revenue. It had 30 million users, high growth velocity, and panache. It also had Kevin Systrom.
This was a strategic play, not a commercial one. It made no commercial sense but great tactical sense.
Zuckerberg hinted at this long game when he commented on his Facebook page after the deal: "This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. But providing the best photo-sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together. We don't plan on doing many more of these [acquisitions], if any at all."
It was fascinating that on the day Facebook announced this acquisition, another big media group, Time, released the results of a study it had commissioned into how people use media. It found that young people with access to multiple media platforms - internet, TV, magazines, tablets, smartphones and internet television - switched between mediums 27 times an hour.
The scholar who analysed the project for Time concluded: "This study strongly suggests a transformation in the time spent, patterns of visual attention and emotional consequences of modern media consumption that is rewiring the brains of a generation of Americans like never before."
In plain language, the media is increasingly dealing with consumers who have the attention span of a gnat.
Paul Sheehan is a Sydney Morning Herald columnist